Eli Lilly is having
trouble obtaining and retaining insurance coverage for Zyprexa
litigation because apparently insurance companies are no longer willing
to buy its wide eyed innocence routine when it comes to the company's
fraudulent off-label marketing schemes.

In filings with the SEC,
Lilly admits that it is having problems and that the company may end up
having to pay its own Zyprexa costs, but blames it on the insurance
industry stating: "We have experienced difficulties in obtaining
product liability insurance due to a very restrictive insurance market
and therefore will be largely self-insured for future product liability
losses."

As for the insurance that Lilly does have to cover past
and future Zyprexa lawsuits, the filing reports that carriers have
raised defenses to their liability and are seeking to rescind the
policies, and Lilly further warns that, "there is no assurance that we
will be able to fully collect from our insurance carriers on past
claims."

Some internal Lilly documents recently leaked to the
press, that Lilly somehow managed to have sealed with a court order,
reveal that Lilly hid the side effects of Zyprexa identified in its own
clinical trials a decade ago and engaged in wide-ranging off-label
marketing schemes to make a drug approved by the FDA only to treat
adults with schizophrenia and bipoloar disorder into its top selling
product bringing in a reported $30 billion thus far.

In light of
these insurance problems, Lilly could be likened to a dog chasing its
tail. While on one hand, it is being sued for illegally marketing
Zyprexa off-label, if it stops the illegal conduct profits will plummet
and it won't have the money to pay the litigation costs.

However,
Lilly has apparently decided to take the low road, because to date,
settling with 26,500 Zyprexa cases out of court by paying out over $1.2
billion has done nothing to lower the off-label sales figures for
Zyprexa. In fact, in 2006, sales of the drug increased 12%, according
to SEC filings.

In 2003, the FDA ordered warning labels on all
atypicals, of an increased risk of high blood sugar and diabetes and
said blood sugar surges in some patients were associated with
life-threatening medical conditions or death. In 2005, the FDA added
the strongest warning available, a black box, stating that the drugs
increased the risk of death in elderly patients with dementia. The
warnings did nothing to slow off-label prescribing of Zyprexa.

It
is still being freely prescribed for uses never approved or intended.
On April 25, 2006, Bloomberg News reported that in 2005, nearly 7
children out of one thousand were taking an antipsychotic, and among
senior citizens 65 and older, antipsychotic use was 21 per 1000. Per
patient antipsychotic costs for children 19 and under have increased
196%, or nearly triple 2001's total, according to Bloomberg.

An
assessment by Christoph Correll, Child and Adolescent Psychiatric
Clinics of North America, January 2006, in USA Today, shows Zyprexa to
be the worst of the atypicals for children and lists side effects of
diabetes and weight gain with Zyprexa as "severe."

Zyprexa is
not approve for any on-label indication for children but even if it
was, schizophrenia is extremely rare in children at about 1 in 40,000
under the age of 18, according to the National Institute of Mental
Health, and psychiatrists do not even agree on what criteria should be
used to diagnose children with bipolar disorder.

Medco
did an analysis of outpatient prescriptions for USA Today and found
that, in a sampling of about 2.5 million of its 55 million insured
members, the rate of children 19 and under with at least one atypical
jumped 80% from 2001 to 2005. And that number only represents privately
insured kids, and not those in foster care or covered by Medicaid.

In
what outraged critics called an unethical and dangerous experiment
conducted by Lilly on children, on May 1, 2006, the New York Times,
reported that "psychiatric researchers have been experimenting with a
bold and controversial treatment strategy: they are prescribing drugs
to young people at risk for schizophrenia who have not yet developed
the full-blown disorder."

The study, co-funded by Eli Lilly and
the National Institute of Mental Health, and published in the May 2006,
American Journal of Psychiatry, involved 60 patients, mostly
adolescents, who supposedly scored high on a scale that assessed the
risk for psychosis.

The scale rated the severity of over a
dozen symptoms including categories such as grandiosity,
suspiciousness, and bizarre thoughts. The researchers claimed that from
20% to 45% of the people who scored high would go on to develop
full-blown psychosis, in which the symptoms would become extreme.

In
the first year of what was scheduled to be a 2-year trial, five of the
31 patients on the drug developed full-blown psychosis, compared to 11
of the 29 who were on placebos. However, by the end of the first year,
more than two-thirds of the patients had quit, making it impossible to
interpret any differences between the 2 groups.

The only
definite finding of the study was that patients taking the drug gained
an average of 20 pounds, once again documenting a side effect that has
been known for 15 years.

Experts say the rapid weight gain is
the most worrisome side effect of Zyprexa because obesity leads to so
many other serious health problems like diabetes, hypertension and
heart disease.

Public health programs are throwing good money
after bad paying for Zyprexa. A recent study published in the October
12, 2006, New England Journal of Medicine, funded by the National
Institute of Mental Health, found atypical use with Alzheimer patients
was no more effective than a placebo for most patients and put them at
risk of serious side effects including confusion, sleepiness and
Parkinson like symptoms.

According to the report, about a third
of the roughly 2.5 million Medicare beneficiaries in nursing homes have
taken atypicals, and their use accounts for an estimated $2 billion in
annual sales, much of it paid by Medicare and Medicaid.

All
that said, Lilly cannot claim to be unaware of the continued off-label
sale of Zyprexa in the US, because it buys the detailed prescribing
records for every doctor in the country and provides them to sales
representatives so they can better direct the company's promotion
efforts.

Lilly knows exactly which doctors are prescribing
Zyprexa, in what dose, and how often, on any given day of the year and
that places Lilly in the best position to contact doctors to tell them
to halt the off-label prescribing but that obviously has not happened.

Allowing
Lilly to keep documents that were produced in litigation hidden even
after the cases were settled has done nothing to curb the off-labeling
prescribing of Zyprexa either.

And, the fact that a judge would
even entertain Lilly's demands to place the recently released documents
back under seal has resulted in outrage voiced by health care
professionals all over the US. The pubic health crisis created by
Lilly's off-label sale of Zyprexa for 10 years without warning about
the health risks is no small matter.

On November 16, 2005, USA
Today interviewed FDA scientist, Dr David Graham, the man famous for
blowing the whistle on the mishandling of the Vioxx disaster, who
estimates that there are 62,000 deaths each year from the off-label use
of atypical drugs.

The allegations made by the plaintiffs in
the underlying litigation are all verified in the leaked documents. For
instance, the California law firm, Hersh and Hersh, represented
plaintiffs in the first settlement, who alleged that Lilly
"fraudulently withheld relevant information from potential users of
Zyprexa."

The lawsuits also alleged a failure to warn doctors
and patients that Zyprexa carried potentially lethal risks from weight
gain and diabetes, and one of the leaked documents dated 6 years ago,
written by a panel of diabetes doctors hired by Lilly to assess the
diabetes risk, warned Lilly back then that "unless we come clean on
this, it could get much more serious than we might anticipate."

According
to Leonard Roy Frank, in "Zyprexa: A Prescription for Diabetes, Disease
and Early Death," in the August 2005, edition of Street Spirit, if
Lilly had issued the warnings, "there undoubtedly would have been fewer
cases of diabetes and fewer deaths from taking Zyprexa."

"But truthfulness is not one of Eli Lilly's strong suits when profits are at stake," Mr Franks says.

"Telling
the truth," he points out, "would undoubtedly have cut into sales for
its blockbuster drug (the fifth best-selling prescription drug in the
world), which, in 2004, produced revenues of $4.4 billion, almost a
third of the company's total revenues and more than a third of its
profits."

This is not the first time that the judge's Zyprexa
protective order has been criticized. In 2005, the Swedish Academy of
Pharmaceutical Sciences journal ran an article titled, "Lilly is hiding
negative information about Zyprexa," featuring an interview with Dr
Curt Furberg, Professor of Public Health Sciences, at Wake Forest
University.

Dr Furberg said that he had seen secret documents
on Zyprexa in his capacity as an expert witness and stated that the
most hazardous effects of Zyprexa were hidden from prescribing
physicians and the public.

The hidden Zyprexa evidence is said
to be worse than that revealed on Vioxx and Dr Furber's interview
provides good insight into why Lilly would early on agree to pay a $690
million settlement to the first round of Zyprexa plaintiffs, which
allowed the company to keep the damaging evidence buried.

According
to Lilly, the company has produced approximately 11 million documents
and the court has, without any stated reasons, allowed Lilly to
designate all 11 million as confidential pursuant to Case Management
Order 3, an August 9, 2004, protective order.

Attorneys
involved in the case say Lilly was even permitted to designate reports
and articles about Zyprexa that appeared in the media as confidential.

In
mid-December 2006, Alaskan attorney, Jim Gottstein, obtained some of
the sealed documents by issuing a subpoena for Dr David Egilman,
another expert witness who evaluated the Zyprexa documents for a law
firm in the underlying litigation, to appear for a deposition.

As
soon as he received the documents, Mr Gottstein set out to publicize
the information by immediately providing copies to journalists and
authors including Dr Peter Breggin, Dr Grace Jackson, Dr David Cohen,
Dr Stefan Kruszewski, Judy Chamberlin, Vera Sherav, Robert Whitaker,
and Alex Berenson at the New York Times.

When articles began
appearing in the Times, Lilly obtained an injunction that required Mr
Gottstein to return the documents and identify everyone they were
disclosed to.

After Lilly received the names, on December 29,
2006, the court issued a second temporary injunction to prohibit the
dissemination of the documents by Terrie Gottstein, Jerry Winchester,
Will Hall, Bruce Whittington, and Laura Ziegler.

The injunction
also barred the disclosure of the information about Zyprexa by many of
the most well-known experts on psychiatric drugs in the US, who are
also journalists and authors, to include Dr Peter Breggin, Dr Grace
Jackson, Dr David Cohen, Dr Stefan Kruszewski, Judy Chamberlin, Vera
Sherav, and Robert Whitaker.

At Lilly's request, in early
January, 2007, more names were added to the injunction including two
websites belonging to the consumer protection and patient advocacy
organization, the Alliance for Human Research Protection (AHRP), at
www.ahrp.org and www.ahrp.blogspot.com, and the web site of the
international patient advocacy organization, MindFreedom, at
www.mindfreedom.org, and Eric Whalen and his web site at
www.joysoup.net.

The name of New York Times reporter, Alex
Berenson, the only journalist who actually quoted from the documents in
the press was not included in any injunction. Lilly in fact never asked
for an injunction against the Times, and Judge Jack Weinstein announced
in one hearing that he was not going to issue an injunction against the
Times.

However, for the others journalist, the litigation
process has dragged out at snail's pace and Lilly has been successful
in getting the court to bar them from discussing or writing about the
public health risk created by the continued off-label prescribing of
Zyprexa.

Attorney, Alan Milstein, representing Ms Sharav, the
AHRP, and Dr Cohen, has filed a motion asking the judge to unseal the
documents in question from the original protective order on the grounds
that they should not have been designated confidential to begin with.

At
a January 17, 2007, hearing Mr Milstein told Judge Weinstein that the
documents are critically important to saving human lives, to prevent
human suffering and "this Court should in no way assist Lilly in
keeping them from the public."

The above statement by Mr
Milstein is not an exaggeration. According to recently updated
estimates by Allen Jones, a former Medicaid fraud investigator, in
considering the $10 billion a year spent on atypicals in the US, the
death rate would be close to one patient per $162,000 spent on Zyprexa,
or nearly six deaths for every million.

Lilly is now seeking
civil and criminal contempt charges against Mr Gottstein and Dr Egilman
for their part in warning the public, which Mr Gottstein admits will
hopefully have a negative impact on the sale of Zyprexa for unapproved
uses.

Dr Egilman has recently notified Lilly that he will not be
attending what could be seen as his own funeral in refusing to testify
against himself at a deposition based on his right against
self-incrimination under the Fifth Amendment of the US Constitution.

Several
of the authors and journalists restrained by the injunction have
obtained private attorneys to file briefs arguing against their
inclusion based on rights guaranteed by the First Amendment and some
have testified in person or by phone at court hearings.

Attorney,
Fred von Lohmann, of the Electronic Frontier Foundation, filed a brief
to object to the injunction on behalf of John Doe, referred to as a
citizen-journalist who contributes to the Wiki web site and states:
"The information that Doe desires to publish on the Wiki (including
links to sites where the Lilly Documents can be obtained) plainly
relate to a matter of overriding public concern."

Lilly
apparently believes that showing that there has not been widespread
viewing of the documents is important. However, after Lilly told the
judge that they were not available on the internet and that a
grassroots campaign to disseminate them had "fallen flat," Mr von
Lohmann filed a brief saying Lilly "appears to have been incorrect,"
and supplied the court with affidavits by two persons who said they
easily found and downloaded the files on the internet, and in one
instance it only took 19 minutes.

Ted Chabasinski, the
attorney for Robert Whitaker, Judi Chamberlin, and David Oaks, the
Director of Mindfreedom, is calling for criminal charges against Lilly
executives for illegally marketing Zyprexa for unapproved uses, with
full knowledge that thousands of patients were being injured and
killed. In his latest brief filed on Feb 1, 2007, Mr Chabasinski says
the documents that Lilly claims should be kept secret show this:

"Certain
executives of defendant corporation, motivated by greed, deliberately
engaged in a course of action that they knew would cause, and did
cause, the injury and death of thousands of people.

"Because
of defendant executives' depraved disregard for human life, thousands
upon thousands of innocent people were left with their bodies bloated,
their health ruined, and their lives severely shortened or rapidly
ended."

Mr Chabasinski is advising members of the public to
contact state attorneys general to direct their attention to the Times
articles and the existence of the secret Zyprexa files and a list of
current state attorneys general is posted on the Mindfreedom web site.

Ms
Sharav testified at a January 17, hearing that the public needs to be
warned "because vulnerable people such as children and the elderly and
disabled people are being targeted to take drugs that are doing them
more harm than there is any evidence of benefit."

She freely
expressed her views about Lilly which prompted Lilly's legal team to
ask that her comments be stricken from the record but the request was
denied. When asked what the secret documents showed with respect to the
practices of Lilly, she stated:

"In my opinion, this is about
the worst that I have seen. It borders on indifference to human life.
Eli Lilly knew that Zyprexa causes hypoglycemia, diabetes,
cardiovascular damage and they set about both to market it unlawfully
for off label uses to primary care physicians and they even set about
to teach these physicians who were not used to prescribing these kind
of drugs to, they taught them to interpret adverse effects from their
drug Prozac and the other antidepressants which induce mania.

"They
taught them that if a patient presented with mania after having been on
antidepressants, that that was an indication for prescribing Zyprexa
for bipolar which is manic depression. That is absolutely outrageous
and that is one of the reasons that I felt that this should involve the
Attorney General."

"The sales of a drug that was approved for
very limited indications, for schizophrenia and for bipolar," Mr Sharav
stated. "Each one of these is about one to 2 percent of the
population," she pointed out.

"But the reason the drug became
a four and a half billion dollar seller in the United States," she
testified, "is because they encouraged the prescription for children,
for the elderly, for all sorts of reasons."

She said her
organization had disseminated a video on U-Tube in which a "former
Zyprexa salesman tells exactly what they were taught and how they were
taught to defuse doctors's concerns who saw their patients as he put it
blow up."

Ms Sharav testified that she asked Mr Gottstein for 2
copies of the documents because she wanted to deliver one to the New
York State Attorney General.

Attorney, Richard Meadows, who
represented some of the plaintiffs in cases settled out of court was
called to testify and attorneys were able to establish that the
information contained in the leaked documents is basically nothing new.

He
admitted that the two central allegations in the underlying lawsuits
was that Zyprexa was marketed off-label and that when Lilly sought FDA
approval of the drug that Lilly had information that showed that there
were dangers in regard to the drug.

Near the end of the hearing,
Attorney Milstein argued that the foundation for the injunction was
that the Lilly documents were trade secrets and "yet in all of the
papers they filed, all they do is say, without any kind of support,
that they are trade secrets."

He objected to the blanket court
order for 11 million documents. "You heard the testimony of the
plaintiffs' attorney," he told the judge, "who said to his knowledge,
that virtually every document produced by Lilly in this case is marked
confidential."

In one of the latest development in this bizarre
legal battle, Judge Weinstein has issued a court order with the word
"Invitation" asking Mr Berenson to appear in court, apparently to
guarantee him a front row seat at his own hanging, by giving testimony
on whether he participated in what the judge called a "conspiracy" with
Dr Egilman and Mr Gottstein to violate the order that sealed the secret
documents to begin with.

On the other side of the coin, if the
documents remain sealed, Mr Franks warns that users of the drug,
doctors, and the public are still almost totally in the dark about the
clinical trials and what he calls, "Zyprexa's shameful history."

He
says Zyprexa was approved based on the results of a six-week clinical
trial that involved 2,500 subjects, and two-thirds of them did not even
successfully complete it. "Among those who stuck it out," he reports,
"22 percent of the Zyprexa subjects suffered a "serious" adverse
effect, compared to 18 percent in the group taking Haldol."

There were a total of
20 deaths, including 12 suicides, in the Zyprexa group. Information
documenting these deaths was obtained from FDA files using the Freedom
of Information Act, by one of the currently muzzled journalists, Robert
Whitaker, who wrote that one in every 145 subjects who entered the
trials for Zyprexa, and the other atypicals, died in his best selling
book, "Mad in America: Bad Science, Bad Medicine, and the Enduring
Mistreatment of the Mentally Ill."

According to Mr Frank, Lilly
has another perverse reason for pushing Zyprexa. "It's a cruel irony,"
he says, "that while the company is filling its coffers by selling a
drug that can cause diabetes, four of its top-selling drugs are
treatments for diabetes."

"Eli Lilly gets the customer coming and going," he states.

Evelyn Pringleevelyn-pringle@sbcglobe.net

Evelyn Pringle is a columnist for OpEd
News and investigative journalist focused on exposing corruption in
government and corporate America.

A
big hurdle with the Zyprexa issue is Lilly's credibility over their
continuous PR on how they are going to pay out $1.2 billion in
damages.As long as they keep up this rhetoric and don't actually pay
the issue won't go away.

Think about the need to 'put their money where their mouth is'. ---Daniel Haszard